Wetherspoons boss Sir Tim Martin vows to keep price increases ‘to a minimum’ despite rising costs
Wetherspoons has cautioned that escalating operational costs, including higher labour expenses, increased taxation, and soaring energy bills, are set to depress the pub chain’s profits and contribute to broader UK inflation.
Tim Martin, chairman of the 794-strong group, stated these financial pressures “may result in profits that are slightly below” market expectations.
The business faces an additional £60m annually due to rises in national insurance and wages.
JD Wetherspoon also anticipates an extra £7m in energy costs, alongside a £2.4m burden from the Extended Producer Responsibility packaging tax.
“These cost increases will undoubtedly add to underlying inflation in the UK economy although Wetherspoon, as always, will endeavour to keep price increases to a minimum,” Mr Martin said.
The business reported that profits slumped by almost a third over the past half-year.
Wetherspoon told shareholders on Friday that pre-tax profits slid by 31.9 per cent to £22.4 million for the 26 weeks to 25 January.
It said this was particularly linked to higher wage costs, as well as £10 million of repairs and £9 million in business rates costs.
Meanwhile, revenues grew by 5.7 per cent to £1.09 billion for the half-year, compared with a year earlier, with like-for-like sales up 4.8 per cent.
This was buoyed by a 7 per cent rise in bar sales, while food sales grew 1.3 per centand hotel room sales were down 0.6 per cent after removing a number of third-party booking agents in the UK, “which charged high levels of commission”.
Wetherspoons said that, more recently, like-for-like sales grew 2.6 per cent over the seven weeks to 15 March.
It also revealed that it opened six venues over the past half-year but also shut or sold off six.
The hospitality business is expecting to have opened around 15 managed pubs by the end of the current financial year.
The sector was given a slight reprieve when the government announced later in January that pubs and music venues would be given a 15% discount on their business rates bills from April and will not see increases for two years.
But pubs are still facing rising energy and wage costs and the prospect of consumer caution amid the Iran war.
